At the Helm

How David Shulkin runs America's largest health care system

Lessons from the C-suite: David Shulkin, Under Secretary for Health, Department of Veterans Affairs

by Eric Larsen, Managing Partner

Welcome to the "Lessons from the C-suite" series, featuring Managing Partner Eric Larsen's conversations with the most influential leaders in health care.

In this edition, David Shulkin, Under Secretary for Health at the Department of Veterans Affairs, gives Eric an update on reforming veterans' access to health services, explains why he thinks like a physician-entrepreneur, and talks about how the private sector and VA can learn from each other.

Q: David, your background is as varied as they come—you've been a hospital CEO, a CMO in multiple places, a published author, and a highly successful entrepreneur. And now you're running the Veterans Health Administration (VHA), the single largest health care system in the United States, with a $63 billion annual operating budget; 318,000 employees; 168 hospitals; and 1,700 different medical facilities. You serve nine million veterans. As you reflect on your career, what are some of the impactful moments that led you to here?

David Shulkin, Under Secretary for Health, Department of Veterans Affairs

David Shulkin: I trace much of my behavior back to my childhood dreams. I really wanted to be a fireman. The volunteer fire department was on my street growing up, and I would rush to the window every time I heard the fire engines. As soon as I turned 16, I became a volunteer fireman.

While I ended up a doctor and not a fireman, I still have that desire to rush in to help people. In my career, I've been attracted to situations that need someone to turn things around or provide some direction or leadership.

The opportunity to serve at the Department of Veterans Affairs really spoke to me in this context. If somebody needs my help, I want to be the one to jump in.

Q: You mentioned your attraction to situations that need turning around. Can you explain your philosophy on change management?

Shulkin: I approach problems from two perspectives.

The first perspective is as a physician. One of the reasons I've never stopped practicing medicine is to keep that perspective. Right now, I practice at the Manhattan VA, where I'm the walk-in clinic doctor. When I make decisions, when I think about issues, when I think about where to put resources, I like to think first as a doctor caring for patients.

The second perspective I have is as an entrepreneur. Startup people and entrepreneurs have a vision. They see a problem and a solution, but they don't focus on the barriers; they see past those. They invest in solving the problem with the hope of a longer-term, brighter outcome.

Q: One might say you are a juxtaposition of two seemingly contradictory things. On the one hand, some have observed that physicians, by nature, aren't terribly entrepreneurial. In fact, we train physicians such that they 'cannot be wrong,' which is the opposite of the entrepreneur's mindset: experiment, prototype, and 'rapidly fail.' You seem to embody both sides of that personality. Fair?

Shulkin: Health care is very complex. It's a congruent spot of different factors and forces. Great leaders approach it from different perspectives. If you're really strong financially, but you don't have an appreciation for the patient experience or the quality outcomes, you can have the best financial results and be a failure to your patient population. If you focus solely on quality and patient experience, you could be a failure to your population by putting your enterprise out of business by not paying attention to the bottom line.

What I always find is that many people are still stuck, especially physicians. Are you a suit or are you one of us? I think that's a distinction that frankly is not appropriate, because you have to be both.

Q: What has surprised you the most about running the VHA system?

Shulkin: One of the things that surprised me coming into VA is how many different ways we're touching different parts of American medicine.

We have a program that was started in 2011 called the Million Veteran Program and we are collecting the genetic sequencing material from veterans. We've just now signed the Department of Defense agreements so we are going to be collecting it from Department of Defense members around the world. We will, this summer, reach 500,000 participants. That allows us to do exactly what you're saying, which is to be able to take the sequencing material and tie it to a 25-year history of an electronic medical record that is so complete with not only medical information but social, environmental exposures, military exposures and be able to start answering questions.

In fact, we have nine peer-reviewed research programs that are answering really, really interesting questions right now and Vice President Biden's cancer moonshot initiative is actually helping expand that. So one of the agreements that we'll have announced before June 29, I think, because we have a White House summit coming up, is an agreement with the Department of Energy to use their unbelievable computational infrastructure, their supercomputers, into the VA database to be able to really start mining this information in a way that is extraordinary.

So I think we're going to have really huge advances in this field because of the investment of a national resource like this. Of course its primary goal is that, why people are donating is to help other veterans because that's what veterans do. They say, 'Hey, if this can help my brother or sister and I want to do it.' But it's not just going to help veterans. It's going to help all Americans. There's no question.

Turning around VA

Q: There's no more venerated group in American society than veterans. When you were nominated to lead the VHA, the organization was in turmoil and in the news for problems with veterans' access to care, particularly for lengthy wait times. Can you offer some reflections on your thinking at that time, particularly on the challenges the VHA faced?

Shulkin: It took almost a year for me to be confirmed. During that time, I was able to think about the issues VA was facing. I came up with five priorities I would undertake if I were given the opportunity to be in the position. I was pretty sure that I would change them after being in the job. But I haven't changed any from day one.

Q: What are those priorities?

Shulkin: Fixing wait time and access problems is priority number one.

The second priority is employees. I'm always surprised that no one asks why patient satisfaction, or veteran satisfaction, isn't explicitly one of my five priorities. Of course I care about that; it's the ultimate outcome. But I know that if I don't have satisfied employees who believe in what we're doing, there's no chance of having satisfied patients and satisfied veterans.

The third priority is best practices. As you travel the VA, you see incredible things, but you just don't see them consistently across the organization. Now we're building the infrastructure to be a learning system, and we're changing the culture to support sharing of best practices across the organization.

Advisory Board CEO: My favorite best practices? The ones that are working for you.

The fourth priority is working with the private sector. What we learned from the wait time issue is that the need for veterans' health care is so great and VA can't do it alone. We need strategic partners, whether they're fellow providers, technology companies, or community organizations. We have the opportunity to implement this in a way that approaches it like an accountable care organization, so that no matter where veterans receive care, VA has total responsibility for coordinating that care, for outcomes, for transition between care sites.

The last priority—which is the most important, a culmination of the others—is to regain the trust and confidence that VA has lost with both veterans and the American public. Our currency is the trust of veterans and the American public, who ultimately pay for VA. If we're not regaining that trust, we're not being successful.

We're managing all of these issues under a public microscope, and everybody has an opinion on what's happening. That's actually a gift to VA because it gives us an ability to be really clear on what our job is and know whether we're making a difference or not.

Q: Tactically, where are you on access?

Shulkin: When I got here, I was told that hundreds of thousands of patients were on wait lists greater than 30 days. Hundreds of thousands. My reaction was: Which of those patients must be seen sooner? But there was no way to know; VA did not have a way to determine patient prioritization.

I was told there were 31 different ways to order a consult, and I decided we would change that to two: urgent need or routine.

Once we implemented that approach on Nov. 1, 2015, I had the answer to my original question: We had 57,000 urgent consults greater than 30 days. Fifty-seven thousand too many. I declared an emergency, and I called for a stand down. A stand down is when you stop what you're doing to focus on the most important thing, usually the battle that lies ahead of you.

Our stand down, which was two weeks from the day I got that data, required every VA medical center in the country, without exception, to be open on Saturday, Nov. 14, 2015, and to call those 57,000 urgent consults in to get care no matter what it took. We didn't do it alone. We worked with our academic partners, medical schools, DOD, community groups, and veterans' Veterans Service Organizations. We didn't stop until we completed the 57,000 consults.

We were also able to create an appointment urgency measure. On Feb. 27, we had a second stand down, where we had 81,000 urgent appointments squared in 30 days.

The numbers now are more reasonable and manageable, although our goal is zero urgent patients waiting.

I've also created the Declaration of Access—based upon the Declaration of Independence—which outlines the nine principles to be able to offer same-day services by the end of this year. Every medical center management team has signed their commitment to do this. Today we have over 50 medical centers with same-day access.

Teaming up with, and learning from, the private sector

Q: As you mentioned, involving the private sector is tied to solving access issues. What's the update there?

Shulkin: The core of our plan to develop a high-performance network is the belief that wherever veterans can get the best outcome—within the VA health care system or private sector—that's where they should get their care. VA's competencies then become much more focused on care coordination, analytics, and delivering the services that it can do best. The private sector delivers the services it can do best.

This example might be simplistic, but let's talk about maternity care. As women become an ever larger portion of veterans, should VA develop expertise in maternity care? My answer is no. The private sector does a pretty good job there and has a lot of experience and capable professionals. Why would VA want to start developing that type of infrastructure?

But what about polytrauma care, spinal cord injury, prosthetics or orthotics, PTSD, or military toxic exposures? Does the private sector do that as well as VA? I don't think so.

Q: The idea of a high-performance network is very top of mind for health care organizations in the private sector, too, as we see this proliferation of clinically integrated networks nationally.

Shulkin: Probably the single point that I make to my management team in VA is: Your job is no different than what it means to be running a private sector institution. If you're working in VA, you feel you're being criticized and scrutinized, and everyone's telling you what you can and can't do. Well, guess what? That's what it feels like to be in the private sector, too.

And if you're a hospital CEO, not looking at reinventing the way that you're doing business, not evaluating and challenging every assumption, then you're heading in the wrong direction. I'm asking VA to do the same thing. How do we reinvent ourselves? How do we become in charge of our population, just the way that a private sector CEO would?

Q: When you talked about best practices, you said there's a need to circulate VA-grown best practices among VA itself. Let's look at it from the other side—I'm curious how you approach incorporating civilian-created best practices back into the VA?

Shulkin: I think one of the problems that led to the wait-time crisis is that VA became way too insular. They began to look at themselves as different and were not able to learn from the private sector.

Right before our conversation today, I was doing an exercise with my management team. I said, 'Think back to when you were most proud of VA. What was VA known for that really was leading the industry?' Everyone had different answers, but most of it was leading on electronic records and patient safety.

I then had everyone talk about what VA is currently doing that is world class or could be. I was blown away by how big the list was. VA can assume the leadership position again in health care and health, but it needs to be bi-directional. We need to learn from the private sector because there's so much innovation there.

Remaining challenges

Q: Let's discuss the high performing network you have proposed as the way to overhaul care delivery at VA. When such factors as capacity, demand, and competency are inherently local, how do you plan to establish a network that determines whether care for a given patient is better if received in the private sector or provided by VA?

Shulkin: The system of a high-performance network ultimately needs to be a regional and local decision. So if you decide that there are great neurosurgeons in Philadelphia in the private sector, and you don't need to recreate that resource in the VA, then that's the right answer. But if you're in a rural area where there aren't neurosurgeons, you better recruit a neurosurgeon and get that for your veteran population.

So everything turns out to be an understanding of what your local medical dynamics are, what your local outcomes are, both at your VA and in your local private sector. And these need to be regionalized efforts rather than making decisions from Washington. So the role of VA's regional organizations—Veterans Integrated Service Networks—in the future I think is two things. Really understanding how to do this care coordination and development of a high-performance network regionally, and implementation of the best practices. And the focus being that we have to start acting like a system and an enterprise rather than 168 different medical centers. So I am rewriting the job descriptions and the responsibilities of what it means to be a Network Director into a future model, rather than holding onto the past model.

Q: As you look forward at your challenges, what stands out to you?

Shulkin: Where I'm struggling the most and where I feel we're making the least progress is getting leadership from the outside in. I absolutely respect the professionals who have been here and spent their career here; they're what's great about VA. At the same time, you need a healthy balance of people coming from the outside who can say, 'You know what? You don't have to do it that way. You could think about this differently.'

I have 34 CEO jobs that are unfilled right now. There are 113 unfilled 'quad jobs,' which are the CMOs, CNOs, and operating officers. Those are the ones that I'm having the most difficulty with so we have asked Congress for legislative relief that would give us some more flexibility. I think that if we could offer more competitive salaries then we could attract more people.


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